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                            MANUFACTURING OPERATIONS

Santa Clara, Calif., and Maynard, Mass. -- May 18,  1998  --  Digital  Equipment
Corporation today announced that the sale  of  its  semiconductor  manufacturing
operations to Intel Corporation has been completed.

The transaction, which closed over the past weekend, includes  the  transfer  of
the assets of Digital's semiconductor manufacturing operations in Hudson, Mass.,
along with design and marketing facilities  in  Austin,  Texas,  and  Jerusalem,
Israel, to Intel for about  $625  million  after  taking  into  account  closing
adjustments. Approximately 1,800 Digital employees became Intel employees at the

Intel will also serve as a foundry for multiple generations of Digital's  64-bit
Alpha microprocessors while Digital retains  the  Alpha  technology  and  Alpha-
-related semiconductor  design  teams  to  develop  future  generations  of  the

In addition, the  companies  will  file  documents  dismissing  previously-filed
lawsuits in Massachusetts, California and Oregon. As  part  of  the  settlement,
Digital and Intel  also  have  entered  into  a  cross-license  of  patents.  In
addition, Digital is working with Intel  to  port  its  Digital UNIX*  operating
system to run systems using Intel's future 64-bit microprocessors. Digital  also
will  work  with  Intel  and  Microsoft*  to  establish  a  common   programming
environment for 64-bit Windows* NT* applications for Alpha and IA-64 platforms.

Digital Equipment Corporation, recognized for product and service excellence, is
a leading supplier of high-performance, Web-based computing solutions which help
enterprises compete in the global marketplace. Digital  gives  its  customers  a
winning  Internet  advantage  through  a  comprehensive  portfolio  of  Internet
solutions based on award-winning systems,  advanced  networking  infrastructure,
innovative software and  industry  applications  --  including  those  from  its
business partners. The  expertise  and  experience  of  Digital  employees  help
customers plan, design, implement, manage  and  support  Internet  solutions  in
countries throughout the  world.  For  the  latest  company  information,  visit
Digital on the World Wide Web at and/or

Intel, the world's largest  chip  maker,  is  also  a  leading  manufacturer  of
computer, networking and communications products. Additional  information  about
Intel is available at

* Other names and brands may be claimed as the property of others.
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